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In late March, Zack Zhang did something that would be simple in most countries, but inconceivable just a few years ago in China, where local governments have maintained tight controls on the population even as the country has leaped toward modernity in other ways.

Mr. Zhang’s accomplishment involved changing the location of his household registration, his official home, which is an important determinant of where he can access government services and, in some cases, buy a house. In China, it’s known as hukou and, in the past, switching it could require years of effort as cities sought to keep at bay a tide of people looking for better futures.

But China’s labour force is now shrinking, and as the country seeks to distance itself from its rust-belt foundations, corporations and cities alike find themselves competing for workers – particularly those with educations and credentials – rather than turning them away. One strategy cities have begun to employ involves lowering the barriers to transferring hukou, providing new freedoms to people such as Mr. Zhang.

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The shift is an unmistakable sign that China’s years of surplus workers are drawing to a close, and an indication that the value of an individual is shifting in a country that still nominally adheres to communist principles, even if those benefits are, for now, unevenly accruing among the educated middle class.

For Mr. Zhang, 23, changing hukou involved using WeChat, the Chinese smartphone app, to uploaded photographs of his national ID card and university graduation certificate details to the Public Security Bureau in Xi’an, the capital of Shaanxi province.

The process took 10 minutes.

Three days later, he received his new hukou, officially entitling him to the benefits of being from Xi’an, including the ability to buy a house.

“It was so quick,” said Mr. Zhang, who is currently in Shanghai pursuing a master’s degree in mathematics.

Possessing a Xi’an hukou gives him a new ability to plan his life – and, he hopes, profit. He immediately acquired an apartment in Xi’an. Housing “prices are going up so fast in Xi’an right now,” he said. “If I don’t buy right now, with the population booming, the price will only keep going higher.”

More than 400,000 others have received Xi’an hukou since the city relaxed its policy last March. Local media have dubbed it the “Great Xi’an Talent Import.”

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But Xi’an has competition.

Other major Chinese cities, including Tianjin, Nanjing, Wuhan, Hangzhou and Suzhou have all recently lowered the barriers to obtaining hukou. Together, they have quietly eroded hukou’s grip, diminishing the power of a system that has, since soon after the Communist Revolution, used household registration to formalize wide-scale segregation, keeping rural residents out of wealthier cities and people in poorer cities away from richer centres.

Chinese cities where hukou

Requirements have been lowered

Tianjin

Beijing

Detail

CHINA

Shijiazhuang

0

2,000

KM

HEBEI

Yellow

Sea

CHINA

Xi'an

JIANGSU

SHAANXI

Nanjing

Shanghai

Wuhan

Suzhou

HUBEI

Hangzhou

0

250

ZHEJIANG

KM

MURAT YÜKSELIR / THE GLOBE AND MAIL, SOURCE:

TILEZEN; OPENSTREETMAP CONTRIBUTORS; HIU

Chinese cities where hukou requirements

Have been lowered

Tianjin

Beijing

Detail

CHINA

Shijiazhuang

0

2,000

KM

HEBEI

Yellow

Sea

CHINA

Xi'an

JIANGSU

SHAANXI

Nanjing

Shanghai

Wuhan

Suzhou

HUBEI

Hangzhou

0

250

ZHEJIANG

KM

MURAT YÜKSELIR / THE GLOBE AND MAIL, SOURCE: TILEZEN;

OPENSTREETMAP CONTRIBUTORS; HIU

Chinese cities where hukou requirements have been lowered

Tianjin

Beijing

MONGOLIA

CHINA

Shijiazhuang

Detail

INDIA

HEBEI

0

1,500

KM

Yellow Sea

CHINA

Xi'an

JIANGSU

SHAANXI

Nanjing

Suzhou

Wuhan

HUBEI

Shanghai

Hangzhou

ZHEJIANG

0

250

KM

MURAT YÜKSELIR / THE GLOBE AND MAIL, SOURCE: TILEZEN; OPENSTREETMAP

CONTRIBUTORS; HIU

A concept borrowed from Soviet Russia, hukou ties a person to a place rooted in their ancestry rather than their chosen residence. It has long played a fundamental role in determining social benefits in China. Without local hukou, a migrant worker living in a faraway city might have difficulty buying property, placing a child in a public school or receiving a pension.

But China’s demographics are rapidly changing. Its population will soon, demographers believe, begin to shrink. Its available work force already began to diminish in size in 2012, and it has become clear to cities that “if you really want a booming economy, you need people,” according to Wu Xiaogang, founding director of the Center for Applied Social and Economic Research at the Hong Kong University of Science and Technology.

Cities have attempted to lure new people by lowering hukou barriers since at least 2003, when Shijiazhuang, the capital of Hebei province, dramatically lowered its requirements. But Shijiazhuang, one of the world’s most polluted cities, is not China’s most desirable destination.

The more recent wave of falling hukou requirements includes newly arrived first-tier cities, the upper crust of Chinese urban centres. Tianjin, a 33-minute bullet-train journey from Beijing, relaxed its hukou standards in mid-May. A stampede ensued, as people sought hukou in a city so close to Beijing that a person could easily commute to work in the capital. Within 24 hours, 300,000 people had downloaded the application app.

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“The value of human beings has increased,” said Zhan Shaohua, a social economist at Nanyang Technological University in Singapore. Part of that is simple economics – labour becomes more valuable when it is in shorter supply. But workers “are also consumers.”. They need housing, they need goods. So, ”they are a very important driving force for urban economic growth. More and more cities are realizing that.”

That’s a fundamental shift from the days when urban bureaucrats were nervous about accepting new residents out of fear they would be obligated to provide housing and jobs.

Systemic issues do, however, remain. Chinese cities do not possess many of the taxation powers exercised by those in the West, removing one incentive for municipal leaders to increase their populations. The lowering of hukou barriers, meanwhile, has itself been discriminatory, applying largely to educated white-collar workers while offering little for migrant labourers with the most to gain from social benefits in the cities where they have chosen to live. “They are not making things very easy for the regular migrant workers that don’t have a college degree,” said Kam Wing Chan, a scholar at the University of Washington and the author of Urbanization with Chinese Characteristics: The Hukou System and Migration.

“In some aspects, actually, thing have regressed,” he said. The number of migrant children in Beijing and Shanghai has dropped dramatically in recent years, he said, an indication of deteriorating conditions for that population, which is struggling to find suitable schooling in cities that largely bar public education to outsiders.

Still, even in cities where local hukou remains difficult to obtain, its importance is diminishing. Take Shanghai, which has begun providing a public pension to people without hukou, so long as they have worked in the city for more than 10 years.

There are indications, as well, that cities aren’t attaining the success they claim with their hukou attraction programs.

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Take Mr. Zhang, who has little intention to actually move to Xi’an once he finishes his studies, even though he now has a Xi’an hukou. “The salary here in Shanghai is much higher than Xi’an,” he said.

Scholars, meanwhile, debate whether the hukou system continues to have a future in a country with a growing middle class and increasingly sophisticated economy.

Hukou is declining and will probably end,” Hong Kong University’s Prof. Wu said. “It has lost a lot of its value already.”

Still, the system formally remains, and Prof. Zhan Nanyang, of Nanyang Technological University, expects it to stay. It is a system that allows government to exert control over the population, and “I don’t think local governments will just get rid of it,” he said.

With reporting by Shaun Yang and Alexandra Li

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